Pediatric Payment Corner – May 2017

By Jonathan Jantz, MD, FAAP

An unfortunate conundrum exists around newborn hospital charges.

For everyone who still sees newborns in the hospital, newborn rounds can be quite satisfying as we see the newborns for their first exams and early counseling and sometimes just enjoying an established family during a typically joyful event. Unfortunately, insurances around this time period can create confusion and frustration in the billing department.

Various insurances have different, but overlapping rules for coverage of newborns. For example:
Commercial insurances frequently cover the infant on the mother’s policy for the first 5 days if the insurance has maternal benefits. However, not all policies have maternal benefits if they were “grandfathered in” as an insurance from before the Accountable Care Act (ACA). If the mother is on Medicaid the child will automatically be placed on Medicaid on the same Managed Care Organization (such as Amerigroup, Sunflower or United Healthcare Community Plan) as the mother, assuming the child qualifies.

This creates the question of what coverage will be effective during the first 5 days (i.e. Is the child included in a ACA plan and covered by the mother’s insurance for 5 days or is the child on a grandfathered-in plan and potentially not covered by that insurance during the first 5 days?

This can easily go under the radar until several months later when the insurance company that your billing department thought was covering the initial days after labor and delivery contacts you asking for their money back claiming that the child had a second policy that was primary and theirs was secondary or possibly not in effect.

Logically this seems ridiculous and absurd. So, how does it happen? It starts with your pediatric clinic billing department being responsible and filing insurance on the newborn promptly to avoid missing the timely filing window (90 days). Then the hospital, up to 3 months later, files their portion of the claim for hospital charges to a different insurance that they now have information indicating was primary. This becomes complicated by the fact that the insurance company that the pediatrician thought was primary is now asking for their money back.

That means you now are obligated by contract to return the payment to the original insurance company and since your timely filing period, usually 90 days, has run out, can no longer obligate the true primary insurance company to pay for the services provided.

At that time, if the true primary insurance is a private insurance with the secondary being Medicaid, the only option is to file with them and have the claim denied. Then your billing department has to file again with Medicaid as Medicaid is obligated to cover (assuming your patient qualifies) if private insurance does not. This will require that you document timely filing the first time to Medicaid.

On the other hand, if both primary and secondary insurance are private, both can then deny payment. The secondary insurance (the one that your office thought was primary) denies payment because your office did not file first with the primary insurance. Then the true primary insurance denies payment because your office missed the timely filing deadline.

This puts you back to working with your office billing department to establish policies to avoid missing the timely filing deadline. If your office is like ours, they are checking insurance status at every check in to clinic and making calls in between. If someone is not showing up for well child visits, the claim may fall through the cracks. We have had that happen.

Your office should keep a log of newborns seen at the hospital and try to get confirmation of their insurances or lack thereof. Know that just when you think you have closed the gaps, a child comes in months later and your office discovers that he/she was covered by a policy that the father had at work but the mother did not know about. Alternatively, we have had mothers show up at our office where our staff dutifully checked their eligibility for Medicaid and when our staff told them that they were not eligible, the mother pulled out an insurance card and said, “Will this work?”.

For everyone that does not make hospital rounds, the final scenario can still catch you months after the well checks or or ill visits. In the end, I suggest that we all express our appreciation to our dedicated office staff and their detective work to avoid problems. Then if you are left holding the bag, contact the primary insurance company to express your dissatisfaction with their policies.